China's prime minister is to head a new telecoms and IT commission to pull together policy making for the country's information industries.

The new body will be under the control of the State Council, according to the official China Daily newspaper.

"The new body will have a direct say in policy formulation, as opposed to serving as a rubber stamp," said telecoms analysts at investment bank Nomura in Hong Kong.

Previously, responsibility for telecoms, IT and the cable network was split between three ministries, hampering development and causing confusion over which edicts carried most weight, analysts say.

Heavyweight line-up

As well as prime minister Zhu Rongji, the new body will include vice-president Hu Jintao, whom Western diplomats in Beijing say is a strong candidate to succeed Jiang Zemin as China's president next year.

Among the senior ministers on the panel are Wu Jichuan, the Minister of Information Industry, Li Lanqing, the Director of the State Postal Bureau, and Zeng Peiyan of the State Development Planning Commission, who will direct a national information industries promotion office.

"The state government will make some major moves in promoting the development of information industry", China Daily quoted an official as saying.

Jubilation

Sector-watchers have welcomed the move. "We believe that, in the years to come, liberalisation, deregulation, reform and transparency will become hallmarks - rather than abstract concepts of China's telecoms sector," said the Nomura team in a note to investors.

Lina Choi of Morgan Stanley in Hong Kong was more cautious, saying "anything that's going to make the regulatory landscape more transparent will be welcomed by the investor community."

Among the issues telecoms analysts expect the new committee to address is the upgrading of the cable network to speed the development of broadband internet, and the restructuring of China Telecom to bring competition into the provision of local loop services.

Uncertainty over government policy on the structure of mobile phone charging has led to volatility in the share prices of Hong Kong-listed mobile operators China Mobile and China Unicom during the last year.